[1/4]U.S. Treasury Secretary Janet Yellen gives a statement to the press during her visit in Mexico City, Mexico December 6, 2023. REUTERS/Daniel Becerril Acquire Licensing Rights
MEXICO CITY, Dec 7 (Reuters) – The U.S. and Mexico agreed on Wednesday to cooperate on stronger screening of investments to reduce national security risks and discussed integrating cross-border payments systems, but U.S. Treasury Secretary Janet Yellen insisted that the moves were not motivated by concerns about China.
The Treasury and Mexican Finance Ministry signed an agreement to exchange information on technical information and best practices as Yellen wrapped up a three-day visit to Mexico City.
The Biden administration is promoting Mexico as a premier investment destination for U.S. supply chains and wants to ensure that it has a robust screening regime in place to handle a growing influx of factory investment.
The effort is aimed at helping Mexico develop a screening body similar to the Treasury-run Committee on Foreign Investment the U.S. (CFIUS), which reviews purchases of American companies by foreign-owned entities and other inbound investments.
“Like our own investment screening regime, CFIUS, increased engagement with Mexico will help maintain an open investment climate while monitoring and addressing security risks, making both our countries safer,” Yellen said in announcing the memorandum of intent with Mexican Finance Minister Rogelio Ramirez de la O.
FENTANYL VS WEAPONS
Yellen’s trip focused on enhancing economic ties and boosting cooperation to stem the flow of the deadly opioid fentanyl to the United States via Mexico, where precursor chemicals from China are often mixed.
Ramirez asked for help in fighting the flow of weapons from the United States into the hands of Mexican criminal gangs that he said often outgun police departments and Mexico’s military.
“On this side of the border we’re doing everything we can to detect and prevent” the shipping of fentanyl to the U.S., he said. “So we have also asked for the same level of cooperation from the U.S. with these (arms) shipments.”
“NEAR-SHORING” BOOM
Mexico is attracting a major influx of manufacturing investments to supply the U.S. market, raising concerns that China or other countries could use it as a back door to get around restrictions on U.S. export controls for sensitive technologies such as semiconductors.
The near-shoring boom brought Mexico $32.2 billion in foreign direct investment in the first three quarters of 2023, close to the full-year 2022 total of $36 billion.
High-profile projects include an estimated $5 billion Tesla (TSLA.O) electric vehicle factory in northern Mexico that has prompted Chinese suppliers to announce plans to invest over $1 billion nearby.
While CFIUS’ increased scrutiny in recent years has sharply reduced Chinese investment in the United States, Yellen said the investment screening talks with Mexico were “not just China-focused.” She said China was welcome to make investments in Mexico to supply the U.S. as long as these could pass national security screenings and meet new tax credit content rules limiting EV battery value chains to 25%.
“If Chinese involvement triggered those rules, which are meant to avoid undue dependence on China, then that’s a no,” Yellen said earlier.
Ramirez, asked whether Mexico was worried increased cooperation with the U.S. would strain its relationship with China, Ramirez said Mexico’s trading relationship with its northern neighbor was “overwhelmingly dominant” and a higher priority than with other countries.
The Treasury and other members of CFIUS, which include the U.S. departments of State, Defense, Homeland Security, and Commerce, regularly work with governments to improve their investment screening, including recently in Europe, Yellen said. More than 20 countries have implemented or enhanced their regimes over the past decade.
PAYMENTS COOPERATION
Yellen said that Treasury and Mexican Finance Ministry officials on Thursday also discussed cross-border payment systems, including possibly integrating them more deeply, which could enhance trade and investment benefits.
Possible deeper integration of the payment systems between the two countries was “not about China,” Yellen said.
Financial cooperation with the U.S. enabled Mexico to look at issues of interest to the country “in particular digital payments and reducing costs to send remittances,” Ramirez said.
Reporting by David Lawder; Additional reporting by Kylie Madry; Editing by Richard Chang
Our Standards: The Thomson Reuters Trust Principles.
BERLIN, Dec 6 (Reuters) – Volkswagen must regularly check its operations in China to ensure its supply chains are safe and comply with human rights laws, two of the carmaker’s investors said, after an audit of its jointly owned Xinjiang site found no sign of forced labour.
The demands made by Union Investment and Deka Investment on Wednesday reflect ongoing concerns over Volkswagen’s engagement in the Xinjiang region, where rights groups have documented abuses including forced labour in detention camps.
Beijing denies any such abuses.
The result of the Volkswagen-commissioned audit comes as Germany is carefully recalibrating its relationship with China, its biggest trading partner, to reduce its exposure to a market that is also a systemic rival.
Volkswagen said on Tuesday that the much-anticipated audit, which was carried out by Germany’s Loening Human Rights & Responsible Business GmbH and two Chinese lawyers from a firm in Shenzhen, had found no evidence of forced labour.
Loening, however, noted that the audit had been limited to the site, a joint venture with SAIC Motor (600104.SS), adding the situation in Xinjiang and the challenges in collecting data for audits were well known.
Germany’s Association of Critical Shareholders (DKA), which represents small investors on environmental, social and governance issues, said the audit was raising more questions than it answers.
“If even a single audit … is so difficult, and can only happen without freedom of expression and labour union rights … further audits can hardly be considered an effective measure,” DKA co-managing director Tilman Massa said.
NO ‘ONE-OFF EXERCISE’
A Volkswagen logo is seen on a Volkswagen ID.5 electric car on display at a showroom of a car dealer in Reze near Nantes, France, November 13, 2023. REUTERS/Stephane Mahe Acquire Licensing Rights
While calling the audit a step in the right direction, Henrik Pontzen, who heads sustainability and ESG at Union Investment, said Volkswagen had not yet reached its goal.
“There is still a lot to do: In China, audits must not remain a one-off exercise. A functioning complaints management system must also be established,” he said.
He also said that Volkswagen’s corporate governance, which has drawn criticism from some of its smaller shareholders, remained the Achilles heel of Europe’s top automaker.
Ingo Speich of Deka Investment, which according to LSEG data owns $99 million worth of Volkswagen’s preferred stock, welcomed the results of the audit but demanded more transparency in Volkswagen’s supply chain.
“Investor pressure has worked. VW has followed the example set by BASF (BASFn.DE), which already started audits in China at a very early stage,” he said.
Shares in Volkswagen were up 3.4% to 112.26 euros at 1144 GMT, lifting them to the top of the gainers on Germany’s blue-chip index, with traders pointing to relief after index provider MSCI (MSCI.N) gave it a ‘red flag’ in its social issue category in 2022, prompting some investors to drop the stock.
Volkswagen’s stock market value has halved to 57.6 billion euros in the past two years. Its shares are down 26% year-to-date, underperforming a 37% rise in the STOXX Europe 600 Auto index .
The automaker’s shares trade at just 3 times forward earnings over the next 12 months, down from 8.8 two years ago, which was the highest among its European competitors.
The price-to-earnings ratio, widely used in financial markets to gauge the relative value of stocks, is now below the 5 for the European car sector.
Reporting by Victoria Waldersee; Additional reporting by Josephine Mason; Writing by Christoph Steitz; Editing by Alexander Smith and Mark Potter
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A “sold” sign is seen outside of a recently purchased home in Washington, U.S., July 7, 2022. REUTERS/Sarah Silbiger/File Photo Acquire Licensing Rights
NEW YORK, Dec 4 (Reuters) – U.S. home buyers are becoming more willing to purchase properties even as interest rates stay high, according to a study by Bank of America (BAC.N) published on Monday.
About 62% of respondents said they would wait for borrowing costs to fall before buying a house, according to 1,000 people polled in September. That is down from 85% six months earlier.
“We are beginning to see that lack of patience play out in the survey, which ultimately should lead to activity going forward,” Matt Vernon, head of consumer lending at Bank of America, told Reuters.
In a bid to tame inflation, the Federal Reserve has raised its policy rate a total of 5.25 percentage points in the last 20 months. The U.S. economy is showing signs of cooling, raising expectations that the rate hikes are likely done.
Nearly 80% of U.S. mortgages have an interest rate below 5%. That compares with average 30-year fixed mortgage rates that surged to 8% in October, the highest in more than two decades, which deterred buyers.
“There’s a clear desire for homeownership, but for some, it has become more challenging to achieve due to current market realities,” added Vernon.
Homeowners were willing to sell their existing homes and take on higher-interest mortgages if they found a property in a more affordable area or their dream home became available, the survey showed. They also sold their homes for career or family reasons or to seek a lower cost of living.
New-home sales dropped 5.6% to a seasonally adjusted annual rate of 679,000 units last month as mortgage rates squeezed out buyers.
Still, Americans’ pent-up demand for homes is expected to increase sales.
“We will be ready and we will be able to utilize our internal resources to meet the improved demand when it happens,” Vernon said.
The second-largest U.S. lender beat Wall Street estimates in its third quarter earnings and its consumer banking revenue increased 6% year-on-year to $10.5 billion.
Reporting by Nupur Anand in New York; Editing by Lananh Nguyen and Leslie Adler
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NEW DELHI, Dec 2 (Reuters) – If India needed any more proof that it was in the midst of a huge housing boom, it got in this week’s GDP data, heightening expectations that the industry will continue to power the economy for years to come.
The construction sector grew 13.3% in July-September from a year earlier, up from 7.9% in the previous quarter and its best performance in five quarters, the data released on Thursday showed.
That helped India expand at a forecast-beating 7.6%, making it one of the world’s fastest-growing major economies. In contrast, Western economies have been squeezed by high interest rates and energy prices, while China has been hobbled by a debt crisis in its property sector.
The long-awaited boom – which has created millions of jobs – comes after about six years of debt and pandemic-induced downturn before the construction sector began improving last year and hitting its stride this year. It has been driven by rising incomes for many Indians, a severe housing shortage in big cities and strong population growth.
The world’s most populous nation had an urban housing shortage of around 19 million units last year – and that is expected to double by 2030, according to government estimates.
“The robust growth in construction has significantly contributed to the economic growth – and is likely to play the same role in next couple of quarters,” said Sunil Sinha, an economist at India Ratings and Research, an arm of rating agency Fitch.
Builders are bullish long-term with many saying the boom could last two to three years and some even more optimistic.
“The housing market could continue to perform well for another three to four years,” Sanjeev Jain, managing director at Parsvnath Developers, a leading real estate company, noting that India is in the initial stages of a housing growth cycle.
Home sales in India’s seven largest cities, including Mumbai, New Delhi and Bangalore, rocketed 36% in the July-September quarter from a year earlier to more than 112,000 units, despite an 8%-18% increase in prices, according to real estate consultancy Anarock.
There was also a 24% increase in new residential projects being launched, data from the consultancy showed.
“The home sales are driven by first-time buyers, and nearly 80% of the houses have been bought by end users,” said Prashant Thakur, head of research at Anarock, adding that there was also strong demand from existing home owners to move to more spacious apartments.
In Mumbai, for example, demand has been strong despite an increase in interest rates of about two percentage points, according to Jayesh Rathod, director of Mumbai-based Guardian Real Estate Advisory.
His company has sold over 5,500 flats in Mumbai and on its outskirts in Thane so far this year, a jump of more than 50% compared to the same period a year ago, he said.
Underpinning demand has been salary hikes for workers in big cities. Average hikes for sectors such as e-commerce, healthcare, retail and logistics have remained above 10% for a second straight year, according to EY estimates.
Home prices in India are expected to rise faster than consumer inflation next year, according to a Reuters poll, with property analysts saying growth will be driven by higher earners snapping up newly built luxury residences in cities.
Housing demand has also picked up significantly in smaller cities in the southern states of Tamil Nadu, Karnataka and Prime Minister Narendra Modi’s home state of Gujarat, according to construction companies who say demand has been spurred by increases in incomes and the migration of workers from rural areas.
The government is also trying to boost the availability of affordable housing by providing subsidies, which is encouraging construction in India’s smaller towns and cities.
Shares in property companies have naturally surged.
The Nifty realty index (.NIFTYREAL) is up some 67% for the year to date compared with a 12% gain for the blue-chip Nifty 50 index.
Notable gainers include Prestige Estates Projects (PREG.NS) which has jumped some 120%, DLF (DLF.NS) which has climbed 67% and Godrej Properties (GODR.NS) which is up 52%.
($1 = 83.3143 Indian rupees)
Reporting by Manoj Kumar, Additional reporting by Nigam Prusty; Editing by Ira Dugal and Edwina Gibbs
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The company logo is seen on the headquarters of China Evergrande Group in Shenzhen, Guangdong province, China September 26, 2021. REUTERS/Aly Song/File Photo Acquire Licensing Rights
HONG KONG, Nov 30 (Reuters) – China Evergrande Group (3333.HK), the world’s most indebted property developer, is seeking to avert a potentially imminent liquidation with a last-minute debt restructuring proposal, three people with direct knowledge of the matter said.
The defaulted company has until a Hong Kong court hearing on Monday to present a “concrete” revised debt restructuring proposal for offshore creditors, a judge said last month after its original plan had lapsed.
But the sources, who declined to be named as the talks are private, told Reuters that creditors were unlikely to accept Evergrande’s new proposal given low recovery prospects and growing concerns about the developer’s future.
With more than $300 billion in liabilities, Evergrande exemplifies a crisis in China’s property sector, which makes up one-quarter of the world’s second-biggest economy. The authorities have scrambled to support the sector as the troubles of embattled developers roiled global markets.
Guangzhou-based Evergrande, which defaulted on its offshore debt in late 2021, did not respond to a request for comment.
Ahead of the hearing when the Hong Kong High Court will rule on a liquidation petition, Evergrande this week offered to swap some debt held by offshore creditors into equity in the company and two Hong Kong-listed units, and repay the rest with non-tradeable “certificates” backed by offshore assets, two sources said.
The offshore assets include the developer’s minority stakes in other companies and its receivables, one of the two sources said, and the certificates would be redeemed by Evergrande when it successfully disposes of the assets. The plan is not expected to require regulatory approval, as Chinese regulators have banned the developer from issuing new bonds, he added.
The new proposal also offers creditors a 17.8% stake in Evergrande, in addition to an October offer, previously reported by Reuters, of 30% stakes in each of its two Hong Kong units – Evergrande Property Services Group (6666.HK) and Evergrande New Energy Vehicle Group (0708.HK) – the person said.
Many creditors were dissatisfied with the October terms as they implied a major haircut on investments, sources have said, forcing Evergrande to scramble to sweeten the deal in what could be its final attempt to avoid liquidation.
LIQUIDATION CHALLENGES
The spectre of a messy collapse of Evergrande has been a major concern for global investors as the Chinese economy sputters, with property sales slowing and hundreds of thousands of unfinished homes across the country.
Chinese authorities have announced a string of measures to revive the sector destabilised by the debt woes of giants like Evergrande and Country Garden (2007.HK).
Evergrande’s debt revamp hopes were derailed in late September when the company said billionaire founder Hui Ka Yan was under investigation for unspecified “illegal crimes”.
The developer was banned from issuing dollar bonds, a key part of the restructuring plan, and its flagship mainland unit was put under investigation by regulators.
If the Hong Kong court orders Evergrande’s liquidation, a provisional liquidator and then an official liquidator would be appointed to take control and arrange to sell the company’s assets to repay its debts.
In addition to shares of its two Hong Kong-listed units, this would include selling its onshore assets, which could face significant challenges, restructuring experts say.
A lawyer for an ad hoc group of key offshore bondholders told the Hong Kong court last month that the restructuring plan could have a higher recovery rate for creditors than liquidation, in which they would get back less than 3%.
Still, the group has nominated consultancy Alvarez & Marsal as its preferred liquidator, two other sources said, as creditors anticipate a potential liquidation of Evergrande, whose liabilities and assets are largely in mainland China.
Alvarez & Marsal did not immediately respond to request for comment.
Top Shine, an investor in Evergrande unit Fangchebao, filed the liquidation petition in June 2022 after it said the developer failed to honour an agreement to repurchase shares the investor had bought in the subsidiary.
Reporting by Clare Jim and Xie Yu in Hong Kong, Scott Murdoch in Sydney; Editing by Sumeet Chatterjee and William Mallard
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Yaskawa Electric robots are pictured at a trade show in Tokyo, Japan, November 29, 2023. REUTERS/Sam Nussey Acquire Licensing Rights
TOKYO, Nov 30 (Reuters) – Japanese robot maker Yaskawa Electric (6506.T) is considering investing around $200 million in the United States, its president said, with an eye to making its industrial robots there for the first time.
The investment would follow other manufacturers from allied nations moving to build capacity in the U.S. as Washington tries to boost high-end manufacturing and strengthen its control over supply chains amid trade tension with China.
While Japanese rival Fanuc (6954.T) is a leading maker of factory robots for the automotive industry in the U.S., Yaskawa hopes to ride a wave of automation in other sectors.
Manufacturing locally “gives our customers a sense of security and reliability,” President Masahiro Ogawa said in an interview.
The more than 100-year-old company has previously said it is looking to invest more in the U.S. The potential scope of the expansion is reported here for the first time.
Yaskawa is the world’s top maker of servo motors, a type of high-precision motor that is widely used in chipmaking tools.
The company, which already makes components in Illinois, Wisconsin and Ohio, is considering expanding U.S. production to modules which incorporate its motors, Ogawa said.
The U.S. views securing access to cutting-edge semiconductors as a priority, with its leading chip equipment makers including Applied Materials (AMAT.O) and Lam Research (LRCX.O).
Foreign manufacturers building out capacity in the U.S. include automaker Toyota Motor (7203.T) and chipmakers TSMC (2330.TW) and Samsung Electronics (005930.KS).
Yaskawa, whose shares have risen by about a third year-to-date giving it a market capitalisation of around $10 billion, is looking at possible subsidies to fund some of the cost of the expansion, Ogawa said.
Reporting by Sam Nussey; Editing by Christopher Cushing
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The Danish central bank, also known as Danish Nationalbank, is seen in Copenhagen, January 22, 2015. REUTERS/Fabian Bimmer/File Photo Acquire Licensing Rights
COPENHAGEN, Nov 28 (Reuters) – Denmark’s central bank said on Tuesday that the risk of further price drops in the commercial property market could be accelerated by Swedish real estate firms selling out of their Danish portfolios, which could hurt banks.
Swedish property firms struggling to refinance their debt amid rising interest rates have begun selling their portfolios, which could have a spillover effect on the Danish property market by pushing down prices, the central bank said.
“Due to the low level of transactions, a price correction related to divestment by the Swedish firms at this point in time would have a relatively great effect,” the central bank said in a financial stability report on Tuesday, adding that the largest Swedish firms have properties in Denmark worth 99 billion Danish crowns ($14.5 billion).
Any heavy divestment by Swedish firms would come amid a sharp drop in the number of commercial real estate deals in Denmark this year, which according to the central bank indicates that prices have not yet adjusted to the new interest rate level.
The central bank warned that as commercial real estate prices fall, the collateral pledged by property firms for loans may not be sufficient to cover their full exposure to banks.
“This may lead to losses for the institutions in the case of default of the loans,” the bank said.
Lending by Danish credit institutions to real estate firms has increased in recent years, amounting to 537 billion crowns or around 38% of their exposure to companies.
The central bank also said Danish real estate firms do not face the same refinancing risks as their Swedish counterparts, because they mostly are financed by mortgage loans with long maturities.
($1 = 6.8090 Danish crowns)
Reporting by Louise Rasmussen and Anna Ringstrom, editing by Louise Rasmussen and Kim Coghill
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Nov 27 (Reuters) – Activist investor Elliott Investment Management on Monday said it was ready to nominate directors at Crown Castle International and push for the ouster of the wireless tower owner’s executives and board members, whom it blames for years of underperformance.
The hedge fund in a letter released on Monday said the company needs “comprehensive leadership change.” It said it was ready to appeal to other shareholders to make changes to the 12-member board, signaling a possible proxy fight next year.
It also wants the company to review its fiber strategy, including considering a possible sale of the business.
It is the second time the U.S. hedge fund is publicly pressuring the company after it urged management to rethink its fiber infrastructure strategy and criticized the company’s returns in 2020.
Elliott, which said it now owns a $2 billion stake in the real estate investment trust, said operational underperformance and flawed capital allocation contributed to a sagging share price.
“We are prepared and intend to make our case directly to shareholders with a majority slate of alternative directors at the company’s 2024 annual meeting,” Elliott managing partner Jesse Cohn and senior portfolio manager Jason Genrich said in the letter.
Shares of Crown Castle climbed more than 6% in premarket trading.
“Crown Castle suffers from a profound lack of oversight by the Board, which has contributed to its irresponsible stewardship and flawed financial policy,” Elliott said.
The hedge fund criticized Crown Castle for having “disregarded our data-driven analysis” and said “our recommended changes were neither made nor taken seriously.”
“The company’s strategy, led by CEO Jay Brown since 2016, has been a failure, as demonstrated by the breathtaking magnitude of its underperformance,” the letter said.
Crown Castle did not immediately respond to a Reuters request for comment.
Reporting by Svea Herbst-Bayliss in Providence and Samrhitha Arunasalam in Bengaluru; Editing by Pooja Desai and Mark Porter
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A gas pump selling E15, a gasoline with 15 percent of ethanol, is seen in Mason City, Iowa, United States, May 18, 2015. Over the past few months, privately held retailers Kum & Go and Sheetz have become the first significant chains to announce plans to start selling E15, 50 percent more than the typical U.S. blend. REUTERS/Jim… Acquire Licensing Rights
Nov 24 (Reuters) – The White House is stalling action on requests by Farm Belt states to allow regional sales of gasoline blended with higher volumes of ethanol after oil industry warnings that the move could cause regional supply disruptions and price spikes, according to two sources familiar with the matter.
The decision underscores concerns within President Joe Biden’s administration over fuel prices, as opinion polls show inflation and the economy as key vulnerabilities for his 2024 re-election bid. In an NBC News poll released on Sunday, just 38% of respondents approved of Biden’s handling of the economy.
Governors from eight Midwestern states – Illinois, Iowa, Kansas, Minnesota, Nebraska, North Dakota, South Dakota and Wisconsin – petitioned the Environmental Protection Agency last year to let them sell gasoline blended with 15% ethanol, or E15, all year, arguing it would help them lower pump prices that soared following Russia’s invasion of Ukraine in February 2022.
The EPA last March issued a proposal that would approve the request by the governors. The agency subsequently missed deadlines to finalize the proposal after oil refiners including HF Sinclair Corp (DINO.N) and Phillips 66 (PSX.N) warned that a patchwork approach to approving E15 sales would complicate fuel supply logistics and raise the risk of spot shortages.
U.S. gasoline typically contains 10% ethanol.
The two sources familiar with the administration’s thinking, speaking on condition of anonymity, said the White House decided to delay action on the matter following the oil industry’s warnings in part because of concern that higher pump prices in certain states could hurt Biden’s re-election chances.
White House and EPA officials declined to comment on the matter.
Ethanol, a domestically produced alternative fuel most commonly made from corn, is cheaper by volume than gasoline. Adding more of it to the fuel mix can lower prices by increasing overall supply. But the U.S. government restricts sales of E15 gasoline in summer months due to environmental concerns over smog.
The ethanol industry for years has pushed to lift the restrictions on E15 sales nationwide, arguing the environmental impacts have been overstated.
Nebraska and Iowa sued the EPA in August for missing its statutory deadlines on the request by the governors. In its October response, the EPA did not deny it that missed the deadlines and did not offer an explanation.
The oil and ethanol lobbies have produced dueling studies that show how allowing E15 in some states would impact prices, with predictable results. Oil industry-backed studies showed price increases, while ethanol industry-backed studies showed any price increases offset by utilizing lower-cost ethanol.
University of Houston energy economist Ed Hirs said the average U.S. consumer does not understand oil markets, leaving the White House and Biden’s re-election campaign vulnerable to accusations that approving the requests by the governors caused fuel prices to spike, even if something else was to blame.
“There is an unwritten rule that high gas prices mean the incumbent won’t get re-elected,” Hirs said.
Reporting by Jarrett Renshaw and Stephanie Kelly; Editing by Will Dunham
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A man works at a computer on a standing desk in an office in the financial district of Canary Wharf in London, Britain, February 8, 2023. REUTERS/Kevin Coombs/File Photo Acquire Licensing Rights
LONDON, Nov 24 (Reuters) – British investment managers have got the go-ahead to develop tokenised funds, in which assets are split into smaller tokens backed by blockchain technology, the industry’s trade body said on Friday.
Tokenisation, or fractionalisation, of funds will enable a fund’s assets to trade more cheaply and transparently and investors to buy into a wider range of assets, industry proponents say.
Funds authorised by Britain’s Financial Conduct Authority can take the first steps towards offering tokenised funds, provided the investments are in mainstream assets and valuation and settlement arrangements don’t change, the Investment Association said in a statement.
“Fund tokenisation has great potential to revolutionise how our industry operates, by enabling greater efficiency and liquidity, enhanced risk management and the creation of more bespoke portfolios,” said Michelle Scrimgeour, chief executive of Legal & General Investment Management .
Scrimgeour is chair of a working group which is working with the FCA and Britain’s finance ministry to open up opportunities for tokenised funds. Other members of the working group include BlackRock (BLK.N), M&G (MNG.L) and Schroders (SDR.L)
Blockchain is a digital ledger that records ownership of tokens. So far, its main use has been for cryptocurrencies, which remain a relatively small part of the global financial system.
Britain is looking to bolster liquidity in its asset management sector in a revamp of its rules following Brexit.
Investment managers and exchanges in the United States, Europe and Asia have already taken tentative steps in offering tokenised funds.
Reporting by Carolyn Cohn and Elizabeth Howcroft; Editing by Sharon Singleton
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